May 2, 2001
earnings applicable to common shareholders for the first quarter
of 2001 of $83.5 million, or $0.53 per share, compared with $82.6
million, or $0.55 per share, for the same period in 2000.
Earnings reflect the positive impact of colder than normal weather
on Enbridge Consumers Gas operations and an improved contribution
from International activities, partially offset by a loss from Aux
Sable. A $4.5 million after-tax loss on foreign currency
contracts, due to a weaker Canadian dollar, was recorded in the
quarter. Prior year earnings included a positive impact on
earnings of $7.3 million related to income tax rate reductions.
On March 16, Enbridge and Midcoast Energy Resources Inc. of
Houston announced that the companies had entered into a definitive
merger agreement under which Enbridge will acquire all of the
common shares of Midcoast for $US 27 each, for a total cash
consideration of approximately $US 350 million. The closing of
the transaction is subject to approval by the Midcoast
shareholders at a meeting to be held on May 11, 2001, and to
regulatory approvals. It is expected that the remaining
regulatory approvals will be received in time to permit closing by
the end of May 2001. Midcoast is a rapidly growing Houston-based
company engaged in energy transportation and services in both the
United States and Canada. Areas of focus include intrastate and
interstate natural gas transmission and gathering and processing
in both the U.S. Gulf Coast and Mid-Continent regions. Midcoast
has a strong record of accomplishment through both acquisitions
and internal growth.
On April 18, Enbridge announced a partnership with Suncor Energy
Inc., the SunBridge Wind Power Project, to build a $20 million
wind power project in southwestern Saskatchewan. Pending
regulatory approval, the project will generate the province's
first major supply of renewable energy. SunBridge's 17 wind
turbines will generate more than 11 megawatts of electricity for
distribution through the Saskatchewan power grid. The project
will increase Canada's wind power generation capacity by
approximately 10 per cent and has the potential to expand further
if additional market demand develops.
Enbridge President & Chief Executive Officer Patrick D. Daniel
noted, "We will continue to emphasize the formula that has allowed
Enbridge to deliver superior returns for shareholders. This
includes enhancing the profitability of our existing assets,
capitalizing on the growth in our transportation and distribution
platform and developing and acquiring complementary businesses.
Over the last few months, we've also set out additional areas of
emphasis that focus on expanding our North American footprint,
increasing our scale and developing and applying new energy
technologies.
"The acquisition of Midcoast represents an important step in
executing these areas of emphasis. The acquisition further
develops our natural gas transmission business and establishes our
presence in the U.S. Gulf Coast in a significant way. Midcoast is
also an excellent fit with our existing U.S. operations through
the Lakehead Partnership. As with our alliance with Global
Thermoelectric, the SunBridge Project and other opportunities
illustrate our commitment to new energy technologies."
Mr. Daniel concluded by saying, "Strong demand for natural gas
over the next decade also bodes well for Enbridge. We are
well-positioned for increasing supply on three fronts: in Western
Canada with the potential expansion of the Alliance and Vector
pipelines; in the Arctic with our existing operations and
experience in northern construction; and on the east coast of
Canada with our New Brunswick gas distribution franchise and
proposed Cartier system linking offshore gas with central Canadian
markets."
The Enbridge Board of Directors today also declared quarterly
dividends of $0.35 per common share and $0.34375 per Series A
preferred share. Both dividends are payable on June 1, 2001, to
shareholders of record on May 18, 2001.
FINANCIAL RESULTS
Energy Transportation
First quarter earnings were $47.8 million, compared with $51.6
million in the first quarter of 2000. The lower earnings are
primarily the result of losses from the Aux Sable facilities, as
well as a lower contribution from the Lakehead System. These
decreases were partially offset by increased contributions from
Alliance and the Enbridge Athabasca System. Aux Sable losses
result from the unfavourable differential between natural gas and
natural gas liquids prices. Lakehead System earnings continue to
be affected by reduced throughput levels from the Western Canadian
Sedimentary Basin despite persistent strong crude oil prices.
Higher earnings from the Enbridge Athabasca System resulted from
increases in the investment base for both tankage and terminal
facilities. Alliance's increased contribution reflects earnings
on a higher rate base as the pipeline has been in operation
throughout the quarter. In 2000, allowance for equity funds
during construction was earned on a lower rate base as Alliance
was under construction.
The Company expects production of hydrocarbon liquids to climb
steadily over the next several years as increased heavy and
synthetic crude oil production offsets declines in conventional
supply. The requests by shippers to trigger Phase II of the
Terrace Expansion Program and to enhance the delivery capability
of the Lakehead System in the Chicago area refining centre by late
2003 confirm production expectations. Discussions with shippers
are ongoing related to further system expansion to handle crude
oil transportation requirements in late 2003 and beyond, in
particular the timing and specifications for Terrace Phase III.
Energy Distribution
Earnings from Energy Distribution increased $14.3 million to $39.4
million in the first quarter of 2001. The results include
contributions from Enbridge Consumers Gas for the three-month
period ended December 2000 and income from the Company's 32%
investment in Noverco. Due to the seasonal nature of energy
distribution operations, quarterly earnings are not indicative of
full year results.
The increased earnings of Enbridge Consumers Gas reflect higher
distribution volumes resulting from colder than normal weather.
The weather was colder by 18% compared with the same period last
year and was 8% colder than normal. The customer base of Enbridge
Consumers Gas continues to increase at expected rates. Results
from other Energy Distribution operations approximated last year.
Energy Services
Energy Services earnings decreased to $6 million in 2001, compared
with $10.6 million in the first quarter of 2000. Heating,
ventilation and air conditioning sales and appliance sales in the
retail services business were consistent or have increased,
compared with last year. However, additional expenses were
incurred as efforts continue to reorganize and align the business
operations of the unbundled business activities and to reinforce
the Enbridge brand.
International
Earnings increased by $3.6 million to $9.4 million in the first
quarter of 2001. The increase was due to the additional OCENSA
and CITCOL ownership interests acquired in the third quarter of
2000 and higher operating fees for the Jose Terminal.
Corporate
Corporate costs totalled $19.1 million, compared with $17.8
million in 2000. This increase was due mainly to losses on
foreign currency contracts.
Enbridge will hold a conference call at 2:45 p.m. Mountain time
(4:45 p.m. Eastern time) today to discuss First Quarter 2001
results. The call, with accompanying slide show, will be
broadcast live on the Internet at www.enbridge.com/investor. A
replay will be available shortly after the live event.
Enbridge Inc. is a leader in energy transportation, distribution
and services. As a transporter of energy, Enbridge operates, in
Canada and the U.S., the world's longest crude oil and energy
transportation system. The Company also is involved in liquids
marketing and international energy projects, and has a growing
involvement in the natural gas transmission and midstream
businesses. As a distributor of energy, Enbridge owns and
operates Canada's largest natural gas distribution company, which
provides gas and retail services in Ontario, Quebec and New York
State; and is involved in the distribution of electricity. In
addition, Enbridge provides retail energy products and services to
a growing number of Canadian and U.S. markets. The Company
employs approximately 5,500 people, primarily in Canada, the U.S.
and South America. Enbridge common shares trade on the Toronto
Stock Exchange in Canada under the symbol "ENB" and on The NASDAQ
National Market in the U.S. under the symbol "ENBR". Information
about Enbridge is available on the Company's web site at
When used in this news release, the words "anticipate", "expect",
"project", "believe", "estimate", "forecast" and similar
expressions are intended to identify forward-looking statements,
which include statements relating to pending and proposed
projects. Such statements are subject to certain risks,
uncertainties and assumptions pertaining to operating performance,
regulatory parameters, weather and economic conditions and, in the
case of pending and proposed projects, risks relating to design
and construction, regulatory processes, obtaining financing and
performance of other parties, including partners, contractors and
suppliers.
ENBRIDGE INC.HIGHLIGHTS(1)------------------------------------------------------------------------ Three months ended March 31,(unaudited; millions of dollars, except ---------------------- per share amounts) 2001 2000------------------------------------------------------------------------FINANCIAL Earnings Applicable to Common Shareholders Energy Transportation 47.8 51.6 Energy Distribution 39.4 25.1 Energy Services 6.0 10.6 International 9.4 5.8 Corporate (19.1) (17.8) Unusual Items - 7.3------------------------------------------------------------------------ 83.5 82.6------------------------------------------------------------------------------------------------------------------------------------------------ Operating Revenue Energy Transportation 174.6 180.5 Energy Distribution 586.6 427.0 Energy Services 105.4 88.1 International 6.7 4.0 Corporate and Other - 1.6------------------------------------------------------------------------ 873.3 701.2------------------------------------------------------------------------------------------------------------------------------------------------ Cash Provided By/(Used In) Operating Activities Earnings plus charges/(credits) not affecting cash 189.7 150.8 Changes in operating assets and liabilities (138.0) (188.1)------------------------------------------------------------------------ 51.7 (37.3)------------------------------------------------------------------------------------------------------------------------------------------------ Common Share Dividends 56.7 47.3 Per Common Share Amounts Earnings 0.53 0.55 Dividends 0.35 0.3025 Weighted Average Common Shares Outstanding (millions) 156.9 151.4OPERATING Energy Transportation(2) Deliveries (thousands of barrels per day) 2,212 2,139 Barrel miles (billions) 179 181 Average haul (miles) 883 913 Energy Distribution(3) Volumes (billion cubic feet) 113 102 Number of active customers (thousands) 1,538 1,489 Degree day deficiency(4) Actual 1,408 1,193 Forecast based on normal weather 1,304 1,324------------------------------------------------------------------------------------------------------------------------------------------------
1. Highlights of Energy Distribution reflect the results of
Enbridge Consumers Gas and other gas distribution operations on a
quarter lag basis for the three months ended December 31, 2000 and
1999.
2. Energy Transportation operating highlights includes the
statistics of the 15.3% owned Lakehead System and other
wholly-owned liquid pipeline operations.
3. Energy Distribution volumes and the number of active customers
are derived from the aggregate of buy/sell and transportation
service supply arrangements.
4. Degree day deficiency is a measure of coldness. It is
calculated by accumulating for each day in the period the total
number of degrees each day by which the daily mean temperature
falls below 18 degrees Celsius. The figures given are those
accumulated in the Toronto area.
ENBRIDGE INC.CONSOLIDATED STATEMENT OF EARNINGS------------------------------------------------------------------------ Three months ended March 31,(unaudited; millions of dollars, except ---------------------- per share amounts) 2001 2000------------------------------------------------------------------------Revenues Gas sales 478.5 342.2 Transportation 258.7 240.5 Energy services 136.1 118.5------------------------------------------------------------------------ 873.3 701.2------------------------------------------------------------------------Expenses Gas costs 364.2 223.2 Operating and administrative 225.2 201.5 Depreciation 107.5 109.2------------------------------------------------------------------------ 696.9 533.9------------------------------------------------------------------------Operating Income 176.4 167.3 Investment and Other Income 44.8 40.5 Interest Expense (108.5) (102.3)------------------------------------------------------------------------ 112.7 105.5Income Taxes (23.3) (17.4)------------------------------------------------------------------------ 89.4 88.1Preferred Security Distributions (4.2) (3.8)Preferred Share Dividends (1.7) (1.7)------------------------------------------------------------------------Earnings Applicable to Common Shareholders 83.5 82.6------------------------------------------------------------------------------------------------------------------------------------------------Earnings Per Common Share 0.53 0.55------------------------------------------------------------------------------------------------------------------------------------------------Weighted Average Common Shares Outstanding (millions) 156.9 151.4------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the consolidated financial statements.ENBRIDGE INC.CONSOLIDATED STATEMENT OF RETAINED EARNINGS------------------------------------------------------------------------ Three months ended March 31, ---------------------(unaudited; millions of dollars) 2001 2000------------------------------------------------------------------------Retained Earnings at Beginning of Period 581.3 503.1 Earnings Applicable to Common Shareholders 83.5 82.6 Common Share Dividends (56.7) (47.3)Effect of Change in Accounting for Income Taxes - (112.0)------------------------------------------------------------------------Retained Earnings at End of Period 608.1 426.4------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the consolidated financial statements. ENBRIDGE INC.CONSOLIDATED STATEMENT OF CASH FLOWS------------------------------------------------------------------------ Three months ended March 31, ---------------------(unaudited; millions of dollars) 2001 2000------------------------------------------------------------------------Cash Provided By/(Used in) Operating Activities Earnings 89.4 88.1 Charges/(Credits) not affecting cash Depreciation 107.5 109.2 Equity earnings in excess of cash distributions (9.9) (11.8) Loss on foreign exchange contracts 4.5 - Future income taxes 9.7 (38.6) Other (11.5) 3.9 Changes in operating assets and liabilities (138.0) (188.1)------------------------------------------------------------------------ 51.7 (37.3)------------------------------------------------------------------------Investing Activities Long-term investments (17.8) (96.0) Additions to property, plant and equipment (96.2) (52.1) Changes in construction payable (26.4) (29.6) Other (8.9) (4.8)------------------------------------------------------------------------ (149.3) (182.5)------------------------------------------------------------------------Financing Activities Variable rate financing, net 193.3 (277.1) Fixed rate debt issued 295.6 641.2 Fixed rate debt repayments (310.1) (100.0) Non-controlling interests (1.2) (1.1) Common shares issued 4.6 3.4 Preferred security distributions (4.2) (3.8) Preferred share dividends (1.7) (1.7) Common share dividends (56.7) (47.3)------------------------------------------------------------------------ 119.6 213.6------------------------------------------------------------------------Increase/(Decrease) in Cash 22.0 (6.2)Cash at Beginning of Period 67.0 53.6------------------------------------------------------------------------Cash at End of Period 89.0 47.4------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the consolidated financial statements. ENBRIDGE INC.CONSOLIDATED STATEMENT OF FINANCIAL POSITION------------------------------------------------------------------------ March 31, December 31,(millions of dollars) 2001 2000------------------------------------------------------------------------ (unaudited)Assets Cash 89.0 67.0 Accounts receivable and other 1,173.0 747.5 Gas in storage 472.4 519.8------------------------------------------------------------------------ 1,734.4 1,334.3 Property, plant and equipment, net 7,168.8 7,160.0 Long-term investments 1,735.5 1,689.5 Deferred charges and other assets 413.7 384.4------------------------------------------------------------------------ 11,052.4 10,568.2------------------------------------------------------------------------------------------------------------------------------------------------ Liabilities and Shareholders' Equity Short-term borrowings 571.8 261.3 Accounts payable and other 699.0 420.7 Interest payable 94.2 109.3 Current portion of long-term liabilities 133.3 468.6------------------------------------------------------------------------ 1,498.3 1,259.9 Long-term debt 5,772.6 5,592.7 Deferred credits 89.6 69.2 Future income taxes 749.9 756.6 Non-controlling interests 126.3 126.4------------------------------------------------------------------------ 8,236.7 7,804.8Shareholders' equity Share capital Preferred securities 340.3 340.4 Preferred shares 125.0 125.0 Common shares 1,857.2 1,852.6 Retained earnings 608.1 581.3 Foreign currency translation adjustment 13.3 (7.7) Reciprocal shareholding (128.2) (128.2)------------------------------------------------------------------------ 2,815.7 2,763.4------------------------------------------------------------------------ 11,052.4 10,568.2------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the consolidated financial statements.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles and should be read in conjunction with the consolidated
financial statements and notes thereto included in Enbridge Inc.'s
2000 Annual Report. These interim financial statements are
prepared on a consistent basis as those included in the 2000
Annual Report and follow the same accounting policies and methods
of application.
Earnings for interim periods may not be indicative of results for
the fiscal year due to weather variations and other factors.
Certain reclassifications have been made to the prior period
financial statements to conform to the current year presentation.
1. SEGMENTED INFORMATION (unaudited; millions of dollars)Three months ended March 31, 2001 ------------------------------------------------------------------------ Energy Energy Trans- Dist- Energy Inter- Corporate Consol- portation ribution Services national and Other idated------------------------------------------------------------------------Revenues 174.6 586.6 105.4 6.7 - 873.3Gas costs - 354.9 9.3 - - 364.2 Operating and administration 66.9 91.9 58.1 4.4 3.9 225.2 Depreciation 35.9 47.3 23.0 0.3 1.0 107.5 ------- ------- ------- ------ ------- ------- Operating income/(loss) 71.8 92.5 15.0 2.0 (4.9) 176.4 Investment and other income 20.1 13.5 4.3 7.4 (0.5) 44.8 Interest and preferred equity charges (27.6) (41.1) (9.1) (0.1) (36.5) (114.4)Income taxes (16.5) (25.5) (4.2) 0.1 22.8 (23.3) ------- ------- ------- ------ ------- ------- Earnings/(loss) applicable to common shareholders 47.8 39.4 6.0 9.4 (19.1) 83.5 ------- ------- ------- ------ ------- ------- ------- ------- ------- ------ ------- ------- Three months ended March 31, 2000------------------------------------------------------------------------ Energy Energy Trans- Dist- Energy Inter- Corporate Consol- portation ribution Services national and Other idated------------------------------------------------------------------------Revenues 180.5 427.0 88.1 4.0 1.6 701.2Gas costs - 221.4 1.8 - - 223.2Operating and administration 65.0 84.3 44.5 3.3 4.4 201.5 Depreciation 39.0 53.4 15.5 - 1.3 109.2 ------- ------- ------- ------ ------- ------- Operating income/(loss) 76.5 67.9 26.3 0.7 (4.1) 167.3Investment and other income 17.7 17.8 0.1 5.0 (0.1) 40.5 Interest and preferred equity charges (26.5) (42.4) (7.1) - (31.8) (107.8)Income taxes (16.1) (8.9) (8.7) 0.1 16.2 (17.4) ------- ------- ------- ------ ------- ------- Earnings/(loss) applicable to common shareholders 51.6 34.4 10.6 5.8 (19.8) 82.6 ------- ------- ------- ------ ------- ------- ------- ------- ------- ------ ------- ------- ------------------------------------------------------------------------1. Supplementary Financial Information Number of Shares ----------------Common Shares - issued and outstanding 162,104,950(voting equity shares)Preference Shares, Series A 5,000,000(non-voting equity shares)Total vested and exercisable stock options 1,956,747
The Company has a Shareholder Rights plan designed to encourage
the fair treatment of shareholders in connection with any takeover
offer for the Company. Rights issued under the plan become
exercisable when a person, and any related parties, acquires or
announces its intention to acquire 20% or more of the Company's
outstanding common shares without complying with certain
provisions set out in the plan or without approval of the Board of
Directors of the Company. Should such an acquisition or
announcement occur, each rights holder, other than the acquiring
person and related parties, will have the right to purchase common
shares of the Company at a 50% discount to the market price at
that time.
Supplementary information as at April 20, 2001.